Absorption vs. Request-Based Transfer: Retaining Seniority for Employees under Government Policy

1. Introduction

The Supreme Court of India in Geetha V.M. & Ors. v. Rethnasenan K. & Ors. (2025 INSC 33) addressed a critical issue arising from the abolition of the “dual control system” in medical colleges in Kerala. This system had previously placed hospital staff under two separate authorities: the Directorate of Health Services (DHS) and the Directorate of Medical Education (DME). After the State enacted a policy to abolish the dual control arrangement, certain categories of employees were absorbed from DHS to DME by way of “option,” giving them the opportunity to continue their career under the administrative roof of DME.

Key questions arose regarding how the seniority of these absorbed employees should be determined, specifically whether seniority should be reckoned from their initial appointments in DHS or from the date they joined the DME. The dispute led to contrasting decisions by a Single Judge and, subsequently, a Division Bench of the High Court of Kerala, and was ultimately settled by the Supreme Court. This commentary discusses the factual background, the courts’ reasoning, the precedents cited, and the notable implications of the final ruling.

Parties involved included several employees seeking to retain their existing seniority (the “absorbed employees”) and the originally appointed DME staff (the “original employees”). The Supreme Court’s judgment is pivotal in clarifying the scope and application of Rule 27(a) and Rule 27(c) of the Kerala State and Subordinate Service Rules, 1958 (KS&SS Rules), particularly with respect to administrative absorption under a government policy decision.

2. Summary of the Judgment

The Supreme Court emphatically held that where employees are transferred from one department to another in furtherance of a government policy decision (i.e., absorbed rather than transferred on their own request), the relevant proviso in Rule 27(a) of the KS&SS Rules — which stipulates that seniority be counted from the date of joining the new department when an employee “requests” a transfer — does not apply. Instead, the original date of appointment (or date of promotion/first effective advice for promotees/direct recruits) under DHS continues to govern the absorbed employees’ seniority in DME.

Accordingly, the Division Bench’s decision, which had placed these absorbed employees at the bottom of the seniority list, was reversed. The Supreme Court restored the Single Judge’s view, concluding that the exercise of “option” for absorption under a State policy is distinct from a purely voluntary, individual-initiated request for transfer. Consequently, absorbed employees retain their previous service benefits and seniority.

3. Analysis

3.a. Precedents Cited

In arriving at its decision, the Supreme Court referred to the following critical provisions and precedents:

Rule 27(a), Proviso to Rule 27(a), and Rule 27(c) of the KS&SS Rules:
These rules govern the determination of seniority. Rule 27(a) pronounces that seniority is reckoned from the date of first appointment, but its proviso specifies that for “transfers on request,” the transferred employee’s seniority counts from the date of joining the new department. Rule 27(c) clarifies that the seniority of employees appointed via the Kerala Public Service Commission (direct recruits) is normally anchored on the date of their first effective advice.
K.P. Sudhakaran & Anr. v. State of Kerala & Ors. (2006) 5 SCC 386:
This case reaffirmed that when an employee voluntarily requests a departmental transfer, that employee loses seniority in the new department and must be placed at the bottom of the new cadre. The Supreme Court distinguished such a scenario from absorption under a policy decision, making it clear that Sudhakaran applies only to employee-initiated (request-based) transfers.
Kartar Singh v. State Of Punjab (1989 SCC OnLine P&H 482) (Full Bench of the Punjab & Haryana High Court):
Though not from the same State’s rules, the Full Bench’s opinion is illustrative. It held that employees who were shifted from one department to another in a government-wise absorption measure would retain their length of service in the new department. The Supreme Court identified this logic as consistent with the principle that absorption entails the employee becoming part and parcel of the new department.

3.b. Legal Reasoning

The crux of the Supreme Court’s reasoning lies in distinguishing “absorption” from “request-based transfers.” By dissecting the language of the relevant government orders (G.O. dated 25.10.2008 with Appendices I & II) and the specific form of “option” given to DHS employees, the Court found that the employees were not the moving force behind the departmental change. Instead, they furnished options in response to the State’s policy, which required the elimination of dual administrative control. Because this reorganization served public interest and was not a matter of personal or mutual convenience, the “proviso” to Rule 27(a) — otherwise penalizing employees for a self-initiated transfer — was deemed inapplicable.

The Court further emphasized the difference between:

An employee’s freely-initiated request to transfer to another department, which ordinarily requires that the transferee be placed at the bottom of the new seniority list;
A systematic restructuring/absorption mandated by government policy, wherein the post itself is transferred or re-labeled under a different controlling authority, and the employee simply obtains continuity within the newly designated department.

In this particular scenario, the Court noted that even though employees filled out an “option form,” the impetus was a departmental policy transform, not a personal request. Consequently, applying the proviso to Rule 27(a) would be unfair. The “absorbed employees” were thereby permitted to retain their original seniority from DHS with full service credit.

3.c. Impact

This decision has far-reaching consequences for service jurisprudence in Kerala and beyond:

Clarity on absorption vs. request-based transfer: Departments restructuring or reorganizing staff under government policy cannot equate such absorption with a regular transfer. Employees enjoy service continuity and keep their seniority.
Enhanced administrative convenience: The ruling encourages governments to consolidate or reorganize personnel structures swiftly and equitably, minimizing disruptions in seniority.
Future reclassifications and departmental merges: Public institutions worldwide occasionally undertake mergers or policy-based realignments. This precedent guides them in handling the rules around seniority for “absorbed” employees.
Precedential weight on policy-based staff changes: The Court confirms that requiring employees to “optionally” move under a policy, rather than at their own instance, does not strip them of vital service rights accrued in their previous roles.

4. Complex Concepts Simplified

Although the text of the judgment references a variety of statutes and internal government orders, the essential concepts can be reduced to:

Seniority: A legal mechanism determining an employee’s position and priority for promotion within a service or cadre. In Kerala, Rule 27 of the KS&SS Rules typically uses the date of first appointment or the date of first effective advice by the PSC to fix seniority.
Absorption: Occurs when an employee’s post, along with the employee, gets shifted from one authority to another, usually due to an organizational or policy decision. This is not to be confused with a “transfer on request,” where an employee individually seeks to move.
Proviso to Rule 27(a): The rule that penalizes “own-request” or “mutual” transfers by placing the transferred employee at the bottom of the seniority list in the recipient department. This does not apply where the move is mandated by administrative necessity or a statewide reorganization decision.
Policy Decision: A formal administrative determination by the government, done in the interest of public administration. Employees are generally expected to comply, and it does not count as a purely voluntary “request” on the part of the employee.

5. Conclusion

The Supreme Court’s ruling in Geetha V.M. & Ors. v. Rethnasenan K. & Ors. (2025 INSC 33) definitively clarifies that when employees are absorbed under a State-driven policy decision to reorganize departments, their continuous service in the original department must be respected. By holding that the relevant proviso of Rule 27(a), which normally demotes “request transferees” to the bottom of the seniority list, is inapplicable to policy-based absorption, the Court ensures that employees do not arbitrarily lose their years of service.

In broader perspective, this precedent endorses the principle that legitimate government-managed reorganizations should not unjustly disadvantage transferred employees. While it preserves fairness among original and absorbed staff, the Court’s decision specifically underscores the value of transparent rules and consistent communication whenever public administration confronts large-scale structural changes.

Ultimately, this judgment fortifies confidence in public employment reforms, offering guidance on preserving employees’ accrued benefits while enabling governmental bodies to implement necessary restructures for better administration and public service.